Texas Instruments (TXN) Increases its Target FCF Payout, Key Takeaways From Capital Allocation Call - Jefferies

Jefferies analyst Mark Lipacis reiterated a Buy rating and $206.00 price target on Texas Instruments (NASDAQ: TXN) after the company hosted its annual Capital Management Call offering 4 key takeaways:

1) dividend target increased to 40%-80% of the current year FCF from prior 40-60%

2) DOI target increased to 130-190 days from 115-145 days

3) direct to customer sales at 63% exiting 2020 (vs 35% in 2019)

4) Fab 2 (new 300mm fab) output to start mid-2022

The analyst stated "TXN raised its Dividend payout target to 40%-80% of FCF from its previous 40%-60% range. We estimate 2022 FCF at $7.1bn and estimate that TXN's dividend could increase by $0.60-$2.20 over two years to $4.73-$6.31, which would translate to a dividend yield of 2.8%-to-3.7% based on the recent stock price".

For an analyst ratings summary and ratings history on Texas Instruments click here. For more ratings news on Texas Instruments click here.

Shares of Texas Instruments closed at $172.18 yesterday.

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